All Forum Posts by: Jay Hinrichs

I would have to dig into this more but that doesn't sound at all right about how the Census estimates population (and is quite different than what the census itself says or a google search https://www.census.gov/data/developers/data-sets/popest-popp...). That being said, Detroit's politicians have every reason to claim Detroit's population has been growing for years and not just for the first time in 2024 (more federal funds, better press, etc.) The Census has no reason to undercount. So I would lean in favor of the Census until I see something more concrete than merely the assertions of Detroit's politicians. 

Financial freedom won't happen in real estate unless you are able to defy the norm & participate in outliers 

1) You bought in 2010-2020.

2) You bought or refinanced in 2020-2021

3) You've calculated inflation and notice every 12-15 years, you'll need 40-50% more. You've also set aside a tangible amount for medical care.  Meaning if you're 40, you're making 150-200% more monthly knowing the dollar will decline in value to be able to live to 85. Knowing health care costs maybe in the $5-7k/month range.

4) Your leverage situation is capable of handling two troughs; not just RE, but any debt. 

5) Your real estate is physically in shape(no major capex for 7 years +)

6) Your holding cash flow as 50% property reserves before profit. 

7) Your location is quality enough to deter vacancies and, not or, keep very good tenants with average turns of 3, 4 years.

8) You have another stream of income, or two, that can cover 125% of your debt payments.

9) You're insured, mitigated against legal issues & natural disasters appropriately.

10) You're able to save 15-20% of your current income for real retirement age 

If you dont have those things, you're not financially free. Quit focusing on this obscenely overused terms & just develop.

There's just a handful of people that post on this forum that can wake up and do whatever they want. Quit comparing yourself to them and compare yourself to how where you been and how you're going to move forward.

Quote from @Eric Bilderback:

Quote from @Marcus Auerbach:

Quote from @Eric Bilderback:

Quote from @Marcus Auerbach:

We don't have the labor to make more things in the US. 

We still have about 7.4 million open jobs and vs 7 million unemployed. You can't drive unemployment to zero. Anything under 5% is considered full employment. And we are at 4.1%. So while it sounds great to "bring jobs back" - who is going to do them?

And we also have a qualification problem. A modern auto factory does not require much unskilled labor. Material is moved by automated forklifts, and assembly is either done or assisted by robots to meet TQM standards. Much of what you need are engineers and highly skilled workers. We are already short on both.

I doubt that most of the 40% unemployed men of the inner city of Detroit are a good fit for a modern day manufacturing plant.

The Apple CEO Tim Cook said famously: people think we manufacture in China because labor is cheap. The real reason is they have a vast pool of HIGHLY qualified skilled labor.  Video.

I have spent almost 20 years working for a global manufacturer. For any machine that was produced in our US factory and the components needed to assemble the decision was to either fully automate the process to 24/7 production here in the US - or offshore to MX or CHN, the difference being the response time to change orders (6 months vs 6 weeks) due to geographic distance. MX kept us more flexible.

Here is a picture of the BMW plant in Spartenburg, SC and if you want to see the list of jobs they have it's here https://www.bmwgroup.jobs/us/en/location/location-spartanbur...

Why should we care about Apples phones etc.  If they aren't going to bring opportunity to Americans to buy a house, provide for a family then they are not a priority, if they go broke "thems the breaks".  They can take all the money they are spending sending missiles and weapons all across the world and get the folks in Detroit up to speed for those good jobs Apple has.  Americans don't need more technology, we need some good jobs that can create strong communities, towns, neighborhoods etc.  And if your business doesn't provide that then your business is not a priority.  Am I missing something?

Yes, I think you missed my point. It's not about Apple. The issue is: we have more open jobs than people looking for jobs. In other words: we don't need more jobs. And if we create more jobs, who is going to take them?

And a large portion of the people unemployed today have a qualification problem. Simple manual labor is not a thing anymore. You need automation engineers who can troubleshoot a FANUC 6-axis robot - and not a grunt to do heavy manual labor.

And you are not going to train a 40 year old unskilled laborer to become an engineer. Heck, who would even make the investment to pay for college with only 20 working years left to retirement?

Good jobs to create strong communities" sounds really great, we all want that, I am all for it. But the definition of what a good job looks like has changed. Give it another 3 or 5 years. Machines will be picking your strawberries, because they will do it cheaper, better and also at night.

We can recreate an economy like it was in the 80s with "Good jobs for hard working Americans". Tune back the technology. But the world will move on and the ones who say America is a dying empire will have been right.

People today have a qualification problem because the jobs have been shipped over to asia, and industries like timber has been crushed by regulation with the help of BlackRock etc so they can use cheaper labor and make more money.  Nike, Apple etc use these people in asia like slaves the governments are totally corrupt with no labor or environmental protection, impossible for us to compete with that.  The outsourcing of the nations wealth Wall Street and the corporate outsourcers took a huge cut off the top and sent it overseas.  Thats how I view it and that is why Trump was elected I believe.  If Apple can't make money building their technology or Nike can't build their dumb woke shoes here and make money I'm good with that let them go broke.  It took along time to get our population as fat and ignorant as they are today (God bless them, LOL) there could be alot of pain and time whipping our country back into shape.

I didn't know shoes can be woke, good thing I don't have any Nike lol. I agree that Wallstreet and turbo-capitalism took the wealth from the middle class, but the real question is weather it is feasible for us to on-shore production in a reasonable time, AND get wages up AND keep prices from shooting up so affordability gets better AND redistribute income back to the middle class.

It took as all of the 80s, 90s and 00s to offshore our manufacturing. Moving factories and building supply chains takes decades. Raising a workforce with the right qualifications takes a generation. And the sweatshop China you describe has been rapidly vanishing and is being replaced with hyper modern fully automated facilities. 

And you need a very qualified workforce to run them: 1.5 million engineers graduate every year in China, I believe we are just over 100,000

We are asking if we could re-open some of the mothballed factories that was designed to manually assemble a Ford Granada. Meanwhile, BYD is just finishing a car manufacturing plant the size of San Francisco - about 50 square miles large - that will produce a million cars per year. Highly automated factory, not a sweatshop. 

And the cars are amazing! I usually drive German SUVs, but every Chinese car I have driven in the last 2 years makes me realize that they are getting ahead in every aspect. For half the price

So, yeah - something has to change. We can't keep importing everything and the only thing we ship the other way is dollar bills. We do this long enough they have all the dollars and we have all the stuff. Then what?

@Chris Seveney  is like to disagree just a bit. Is your friend really financially free? From my understanding financially free means you can be without a job and live the lifestyle you desire. Your friend has a job that he has to continue to go to, without it, and without investing elsewhere, he is not financially free. Also, in order to reach that you need to excel in certain skills, study hard, and go through probably atleast four years of college. Real estate is accessible to anybody. I think it is also worth mentioning that nvidia is one of the top paying tech companies. To get a degree in tech doesn't guarantee you a job there or somewhere else that pays that much. 

The reality is real estate very much can get you to financial freedom. What you're saying that I agree with is that it's going to take time, it won't happen tomorrow. 

Hello BP community - any one lately come across new construction properties for investors in Columbus OH, most of these builders in Columbus refrain from selling it to investors and only entertain first time home buyers or if you plan to make it as primary home to live in. (Rockford, MI, Pulte, Ryan homes) - any one know of builders who are investor friendly in Columbus?

sachin

 Can you provide a definition of the "option period", never heard that term before. Are you referring to when you have it under agreement but have yet to close? In those instances again its like buying any other home, you put a earnest money deposit that goes into escrow not to the homeowner.

 Except John Clark, the other poster, doesn't know that. Somebody needs to remind him. Were you a success on your first investment?

Points well taken, Jay. That said, I do recall that six years ago, while I had a post running as a top topic for seven days, you had some rather harsh words for Detroit. Perhaps it was an off day, or as you mentioned today, maybe you had experienced some fallout there following a solid decade-long run. In hindsight, I also may have failed to recognize that your intention was to educate newer or less experienced investors. Or perhaps I, too, was having an off day and missed the point. Fair enough.

Detroit’s economic outlook is largely expected to improve over the next few years as the city recovers from recent labor market challenges. If even a few of the legacy auto plants begin ramping up production again, that would be the icing on the cake. - Epic for all.

According to economists’ forecasts, by 2029, Detroiters’ average wages are projected to reach 53.3% of the average wage earned in city-based jobs. While that still reflects a notable disparity, it would be the smallest since these data sets began in 2010, according to Gabriel Ehrlich, co-author of the report and director of the University of Michigan’s Research Seminar in Quantitative Economics. “Fortunately,” Ehrlich noted, “we project the elevated inflation and high interest rates of recent history to give way to modest but steady gains in employment and real incomes.” (Pre-Trump tariffs era.)

Though Detroit’s housing market performed strongly, residents faced some challenges in 2024 as employment declined. However, economists from the University of Michigan expect the city to return to growth this year, supported by easing monetary policy and moderating interest rates. Wages are also expected to rise in 2025 and the years ahead, indicating a broader return to workforce participation—perhaps more so than at any point in the past decade.

While the housing market remained bullish, some of Detroit’s labor market struggles in 2024 were in fact due to high interest rates and sluggish vehicle sales. Nonetheless, the city’s unemployment rate has dropped significantly compared to the early days of the pandemic.

Urban centers like Detroit and its surrounding suburbs are projected to continue experiencing price growth and rising demand.

As Karen Kage, CEO of Realcomp II Ltd., noted in a recent news release: “The city of Detroit continues to be a bright spot for residential real estate, with pending sales at their highest November levels since 2021.” Pending sales rose to 535 in November, up from 386 in the same month in 2021. “This underscores what our Realtors continue to report: higher-than-usual activity, especially for this time of year.”

Urban and suburban areas around in and around Detroit continue to attract families and professionals seeking a balance between suburban comfort and urban convenience. In November, the median sales price in the city of Detroit was $94,500—an 18.1% year-over-year increase.

Other areas saw even stronger gains. Grosse Pointe Park recorded a median home sales price of $490,000 in November, up 15.6% from the previous year. In Brighton (Livingston County), the median sales price surged to $427,450—a 29.5% increase.

Detroit has leapfrogged many other cities in national surveys of real estate professionals for its investment potential and development opportunities. Commercial real estate forecasts for the city are especially optimistic going into 2025.

There’s also strong momentum in the multifamily market. Only two U.S. cities currently have apartment rents rising faster than Detroit. This upward trend shows no signs of slowing, providing good news for property owners and investors alike.

Finally, on a closing note: Detroit’s own Dan Gilbert—who has played a major role in and profited from the city’s impressive 16-year resurgence—recently made headlines again. Just four weeks ago, his Rocket Companies announced a $1.75 billion acquisition of real estate brokerage Redfin.